A Payroll Deduction IRA is a simple way for employees to save for retirement through automatic contributions from their paycheck. It’s designed for small businesses that want to help their workers save without setting up a full retirement plan. Employees choose whether to open a traditional IRA, which may offer tax-deferred growth, or a Roth IRA, which provides tax-free withdrawals in retirement if certain conditions are met. The employer’s role is limited to sending the employee’s chosen amount from each paycheck directly into their IRA account. Employers don’t make contributions themselves and have very little administrative responsibility. Payroll Deduction IRAs are easy to set up, have no complicated reporting requirements, and are a good starting point for businesses that want to encourage retirement saving without a lot of cost or paperwork.